If you were affected by the COVID19 pandemic, whether as someone who lost a job or closed a business, was forced to deal with children at home every day, worked as a health care provider, or was directly impacted with the coronavirus, then you have every reason to believe that 2020 was really bad.
There were definitely silver linings, however. For starters, we saw a remarkable push to develop and distribution a vaccine, which ordinarily requires four to five years. We saw renewed support for mask-wearing (mostly), which has allowed us to flow into a “normal” change of lifestyle that keeps the economy chugging along. And while not optimal, we have found ways to educate our youth and generally keep people safe.
Sure, it may be a while before we shake hands or dive into mosh pits again, but I think we can reflect and mostly agree that we did fine without some of these things.
What I am interested in is looking to the future, specifically 2021, to see what lies ahead. Here are a few thoughts:
Like the 1920’s, which was a remarkable age of prosperity and growth following a global pandemic, I think we are going to see the pent-up demand, fueled by our general inclination toward indulgence and curiosity, blow up.
Introverts, myself included, have mostly weathered the travel restrictions and social distancing, but for those who have the slightest inclination to do something other than use the “random” function on Netflix, myself included, the idea of travel, restaurants, concerts, etc is going to be an itch too strong and often to ignore.
Long term, this could and most likely will lead to a more severe economic recession, as many will spend freely and fail to save for the rainy days. The positive is that many businesses will be better prepared with contingencies to handle significant business interruptions.
The move to break up large tech companies will become very intense, especially given the power and influence these large companies have. I believe companies like Facebook will find the pressures too great to overcome, and while they can make the argument that the company helps consumers, there is ample evidence that it is incredibly detrimental as well.
Amazon is more questionable. It is difficult to disagree with the fact that Amazon has made life incredibly bearable during the pandemic, and the value to consumers is indisputable. Others businesses within Amazon, including AWS, might be the target for legislators, since they can be more easily separated, and while that will not make investors happy, it could be an easy win for a congress that needs one.
Like Amazon, Apple has an interesting case. The closed ecosystem of Apple locks in customers, and the (relatively) recent news that they purposely accelerate obsolescence in their older devices is frustrating, but Apple only controls 40 percent of the US smart phone market and 11 percent globally. That is hardly a monopoly. And to be honest, Apple’s lack of really cutting-edge new products is not a good sign for the company long-term.
Alphabet, the parent company of Google, already has ample competition, so I find it difficult to believe the legislators will just break up a company that is really well run. Does the Google algorithm favor Google companies? Probably, but I would find it difficult to believe that other search engines do not to some degree.
In the end, I see Facebook seeing the most significant challenge in the face of breakups.
Politics as Usual
Everything will turn out fine, and the election of 2020 will fade in our memories just as the election of 2000 faded … remember the incredible controversy from that year? Me neither, because we seem to be fine in spite of it.
As any administration would likely be focused on returning to a healthy economy, we will see a strong push to distribute vaccines and stimulate growth. Small businesses in general will need assistance, especially in the first half of 2021.
Even with the continued grumblings of a rigged election and a general feeling across the country that the days of compromise are gone, we will be too consumed with the Roaring 20’s to care.
Moreover, we will not see the fall of the United States with a very center-moderate democrat in office. We’ll be luck if we see any changes at all.
As businesses and schools were forced to conduct operations remotely and virtually, I think we will see many companies recognizing the financial benefit of keeping their employees at home. Of course, there is no replacing shared work and meeting places, where collaboration and creativity thrive, and workers who thrive in this environment will inevitably gravitate toward jobs and co-working spaces that support it.
In general, however, working remotely reduces overhead and travel costs and time spent in useless meetings, so look for more businesses to integrate some form of virtual work and to actively seek employees that have demonstrated the ability to work in this type of environment.
While we will see decades of growth as people rush out to restaurants, concerts, offices and so forth, many will integrate these behaviors with beneficial habits we formed while being at home. Home gyms, home theaters, remote learning, and a host of industries, like bicycles, saw incredible growth during the pandemic. Shopping at home, with Amazon and Instacart, made life not just bearable but incredibly efficient.
These trends were in motion before the pandemic, but the past year certainly accelerated their adoption. Moving forward, I don’t see these trends reversing to the degree we saw pre-pandemic, which will lead to the retirement of many familiar industries.
While the obvious influence of 2021 may be COVID19, the more critical focus in the 2020’s will be the rapidly changing climate. Whether you adhere to the tenants of climate change, data does not lie
For businesses, I think that will mean opportunistic entrepreneurs and innovators looking for solutions or new locations. We may also see a shift in geographic distributions, especially along coasts and areas where the impact of weather was already significant.
Regardless, we will see more and much needed attention and focus on climate over the next decade, although this attention will be on how to adjust to it rather than avoid it.
Growth in Gig Entrepreneurship
In addition to virtual work and climate change and a host of other variables, we will see a growth of entrepreneurs and self-employed workers finding opportunities in the rapidly changing economies. This growth will be fueled by new needs and problems that remote and virtual working creates and gaps left by existing industries.
This will also fuel a need for protections and safety nets for gig workers, through expanded unemployment and health benefits. Legislators will get behind this to encourage the innovation and risk-taking needed to develop the industries we will need tomorrow.
One thing I will be watching this year is a prediction by Venture Capitalist, Fred Wilson:
I believe that governments will respond to all of these economic challenges by continuing to print fiat money without restraint and by taxing and regulating innovative new companies to protect old and dying companies. This will lead investors to continue to allocate capital to new forms of money (crypto) and new ways of creating and financing innovation (decentralized projects and organizations).
Digital assets and the blockchain in general are incredible fascinating to me, and although they have been around for years, they have been far too unstable and unpredictable for me to embrace or even understand.
That seems to be changing, however, and while the adoption of blockchain technology may not happen in 2021, it will most certainly continue through the 2020’s. I think it is one industry and trend that should be very closely watched.
There will be undoubtedly other trends, such as more adoption of electric vehicles, automation and artificial intelligence, but these will continue in the background as we all focus on getting back to some sense of normal.
Happy New Year!